22nd February 2022 > > Colorado and tax dollars.

Market Snap (at time of writing)

Market Wrap

Putin formally nicks another two chunks of Ukraine. The West has no feasible response except for the threat made by No. 10 of “… a significant package of sanctions to be introduced immediately”.

Except of course, there has been no announcement of exactly what those sanctions are (happy to be corrected if you know more), which kind of makes a mockery of the claim that they will be introduced immediately.

I would have expected the decisions on what sanctions to have been made already given that Putin has been threatening an invasion of Ukraine for months now, but what do I know about the importance or otherwise of forward planning in foreign affairs and war.

Risk assets holding up relatively well which seems likely to change when Russian tanks move on from Donetsk and Luhansk, the two regions of Ukraine which have been under de facto Russian control since 2014.

Curious Cryptos’ Commentary – Colorado

Regulatory competition is a great driving force that encourages innovation, development, and adoption of cryptos.

The CCC firmly rejects the notion that regulations need to be standardised between differing regulatory spheres, spheres that are naturally centred on some degree of sovereignty determined by geography, culture, language, and historical accident. It isn’t a perfect approach I agree, but regulatory competition is better than any other possible alternative, as demonstrated daily by cryptos.

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The positive practical impact of regulatory competition has played out in just the last few years in the US.

The states that have been welcoming to cryptos and the crypto business – Wyoming, Texas, etc. – by legislating for crypto regulation that provides both protection to users and certainty for business have seen a huge influx of tax dollars, which continue to grow by the day.

States that were hostile to cryptos, enforcing business bans and – extraordinarily - bans on individuals accessing centralised exchanges, stood idly by as those tax dollars went elsewhere.

New York state fell firmly into the latter category of legislated illiberalism, a situation that could not last long.

As regular readers know (see CCC 3rd September 2021), the last NYC mayoral election was fought by all candidates promising to make NY the premier crypto friendly state, with legislation and regulation to foster innovation, development, and adoption.

The sight of potential incoming tax dollars can be very persuasive.

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Jared Polis (Democrat), the Governor of Colorado, has announced that state taxes can be paid in cryptos by this summer.

“We won’t be holding those assets in that form, but we will have a layer that accepts payment in those forms and then conversion into the units that we use, which is dollars, for budgeting and payments. But as a matter of convenience for the public, we will be accepting first for taxes and then for many different fees and services by this summer.”

He adds that crypto technology is a “critical part of Colorado’s overall innovation ecosystem”.

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The US in general is getting a long way ahead of any other Western liberal country in the race for crypto tax dollars.